Market comment | Risk-off mood extends, fueling bond demand. FOMC preview

Summary

Increasing contagion fears boosted sovereign bond demand and significantly dragged commodities and equity markets, especially companies with exposure to China

Key points

• Key points:
• Coronavirus contagion fears increase, boosting market-based risk measures (VIX 18
• Oil prices plunge, leading the OPEC and its allies to hold a meeting to study measures
• : Investors seek shelter in bond markets
• Equity extends declines sharply, led by material sectors and companies with their production channel in China
• Italian bonds boosted by easing political risk

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